Cisco Innovation
Patrick Wetterwald
Cisco Technology Center France
© 2003 Cisco Systems, Inc. All rights reserved.
1
Overview of Disruptive Innovation
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2
Disruptive Innovation
Business Models and New Markets, not Technology
• Sustaining innovation – anything that makes current
products and services better, faster or cheaper
• Disruptive innovation – creates new markets or offers
more convenience or lower prices at the low end of an
existing market
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3
Disruptive Innovation and “Overshoot”
Performance
A Key Driver of Market Transitions
Incumbents nearly always win
Disruptive
Innovations
Entrants nearly always win
Time
Source: Innosight
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4
Performance
Different Performance Measure
Two forms of Disruptive Innovation
Wal-Mart, Costco
Time
PC, Wireless Telephony
Time
Company improvement trajectory
Customer demand trajectory
Source: Clayton Christensen
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5
Why Disruption is So Powerful
• Predictive and Pragmatic
Can determine if (and when) a market is ripe for disruption
• Enables firms to tap new growth markets
Low-end of existing markets (over-served customers)
Brand new markets (non-consumers)
• Disruption is about business model innovation
Much harder for incumbents to change their business
models than adopt to new technology
• Creates “double bottom line” impact
As disruptions improve, growth AND margins expand
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6
Cisco – History of Disruption
“Leading Supplier of Enterprise Internetworking”
• Late 1980s – Multi-Protocol Router enables LAN
internetworking to become Enterprise
Internetworking
New market disruption that empowers departmental users of
IT and eventually displaces interoffice mail and “sneaker
net”
• 1991 – Cisco Blue – low-end disruption of SNA
SNA over IP replaces dedicated SNA private line networks
• 1993-95 – Cisco acquires LAN switching
Cisco Fusion was Cisco’s strategy for hybridizing routing
and switching, capturing the growth potential of a low end
disruption
© 2003 Cisco Systems, Inc. All rights reserved.
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Cisco – History of Disruption (cont.)
“Worldwide leader in networking for the Internet”
• Late 1990s – Ethernet+IP vs. ATM internetworking
Low cost, “good enough” Ethernet + IP disrupts ATM in the
battle for Enterprise D/V/V convergence
• 2003 – Cisco acquires Linksys
Captures growth of new market disruption (home
networking)
• 2006 – Cisco TelePresence
Integrated system that delivers “in person” experiences,
simply
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8
Technology Center
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9
Organization: who we are
Office of the President
Chief Development Officer
Horizontal Business Functions
Finance - HR
Manufacturing
Sales - Marketing
Technology Center
Technology Groups
Access
Aggregation
Ethernet Access
Internet Routing
Internet Switching & Services
IOS Technologies
Network Edge Aggregation & Routing
Network Management
Optical
Storage
Voice
Wireless
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Corporate Business
Development
Staff of :
Engineers
BizDev Mgr
Program Mgr
Tech Center EMEA
10
Innovation @ Cisco : organizational view
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11
Technology Center : Mission
Initiate
Nascent
Tech/business
trends
Incubate
Accelerate
Disruptive
Adjacent
markets
Adoption
Product enhancement
• Idea generation
• Idea Traction
• Idea portfolio
• Patents
© 2003 Cisco Systems, Inc. All rights reserved.
• Ideas becoming
Products
• New businesses
12
Technology Center : Background
Standards
Partners
Products
…1997
1998
1999
Partners
Engineering
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2000
Global
Alliances
2001…
…2006
Technology
Center
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Growth/Innovation bets
Healthcare 2.0
Emergent Collaboration
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Connected Life
Innovation Pipeline
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Emergent Collaboration
http://www.secondlife.com
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15
Emergent Collaboration - Enterprise focus
An Enterprise focused immersive
environment, using network
intelligence to simplify all forms
of communications and enhance
collaboration.
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Healthcare : partnership platform
Systems
Devices
ACCESS, Network PACS Med 2.0
People
Telehealth
MDC
Internet
Nurse@Home
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17
Wireless: MuniMesh
Point-toPoint
Bridging
Point-toMultipoint
Bridging
Wireless Mesh
Networking
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Outdoor
Wi-Fi
Extension
18
Sensor Network today
• Current situation:
Sensor / sensor gateway
Connected to PC/patch panel over serial/RS 232
PC is collocated with GW
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19
Sensor Network tomorrow
Management
sensor
Controller
sensor
Controller
Gateway
sensor
Gateway
Gateway
Mesh
Network
Internet
Router
Sensor
Application
sensor
Gateway
Controller
Sensor
sensor
Corp
Network
sensor
Network
sensing
Sensor
Mission
Application
Networking
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